Maybe It's Time For Greece To Leave The Euro

From a hard-nosed economic point of view it makes absolutely no sense for Greece to leave the Euro and revert to the drachma. The disastrous consequences of such a move would go far beyond what some economists blithely characterize as ‘collateral damage.’ And yet, according to the election results, this is precisely where Greece is headed.

Voters say they are sick and tired of being bossed around by Germans and the Troika (European Commission, IMF, and European Central Bank) that have imposed severe structural reforms in an effort to fix the Greek economy and administrative structure. Voters say they want to tear up the agreement that transfers billions of Euros to Greece in return for the difficult reforms that so far have taken a great deal of money out of their pockets through reduced pensions and salaries. And most shocking of all, those nasty people at the Troika even want the Greeks to work harder and start paying taxes. The irresistible force of Greek unwillingness to change will soon meet the immovable northern European object of unwillingness to continue shovelling money to their wayward Greek cousins. One clear outcome of this clash is a Greek default and departure from the straitjacket of the Euro.

As much as I believe a return to the drachma would create even more hardship it may be the only way out of this mess. Efforts to impose a solution from the outside are doomed to fail. At this point any external solution, no matter how economically sound and well meaning, will be still born. A Greek government may be bludgeoned into signing a draconian reform package, but that package will have no credibility and will be rejected in one way or another by the people. Within a matter of months, if not earlier, Greek bureaucrats under enormous domestic pressure, will have bent and amended the agreement completely out of shape.

Let The Greek People Work Out Their Own Solution

Rather than waste time on more acrimonious debate would it not be better to stand back and let the Greeks experience the consequences of default, sky high inflation, and collapse of the banking system that would accompany a return to the drachma? Let the Greek people themselves devise a solution. The EU could then concentrate on reinforcing the firewall to make sure the Greek contagion does not spread. With much of the external Greek debt already written off the impact of a Greek default and departure from the Euro would be less dangerous than a year ago. Also after other weak countries see the post-Euro condition of Greece they may just redouble their efforts to stay in the single currency. The alternative of pouring even more billions of Euros into Greece in return for reforms is doomed to fail. The bitterness felt by the Greeks toward Germany and the Troika spills out even in casual conversation and makes it very difficult to implement any changes.

“We’re Greeks, not Germans.” “The sun shines here. We can’t work as much as the northerners.” “The Germans owe us money from World War II. We don’t owe them a penny.”

“The European Union bureaucrats are as guilty as we are. If our numbers were so crooked why did they let us into the Euro in the first place? Were they sleeping?”

All such comments miss the point that no one forced the Greek state to borrow so much money. No one forced consumers to borrow recklessly. No one forced Greek officials to siphon off so much money in corruption. No external force imposed the self-interested restrictive economic regulations that do so much to stifle growth. Removing those restrictions would not cost a dime, and would do much to stimulate the sustainable growth everyone says they want. But resistance to such a move is great.

Such points may be perfectly valid, but given the current level of popular anger, they are, unfortunately, completely irrelevant. It is time to face this reality and stop kidding ourselves. No package devised in Brussels or Berlin has a hope in hell of being accepted by the Greek people. It is time for Greece to bid adieu to the Euro and find its own equilibrium. Make no mistake. This will be extremely difficult and painful. But there is a chance that after going through this struggle Greece may just find a solution acceptable to most of its people.

From Farm Yard to Fashion Item

Without a doubt the most successful United Kingdom export, used and copied around the world , is the ‘English country squire look’  complete with waxed Barbour jacket and the iconic rubber Wellington boots. Never mind that these items were originally designed to keep people warmish and dryish in a damp and cold climate.

The Wellington boot that started life as a humble, utilitarian piece of rubber footwear serving generations of farmers and stable lads well has now miraculously been transformed into an indispensible fashion accessory from Hong Kong to Rio de Janeiro. The boot allows you to muck around the barnyard all you want, leave the boots lined up neatly in the mud room and enter the house with reasonably clean feet. As school children in rural New England we used to wear the insulated version of those boots from October until April. Once we had a teacher new to the area who wanted us take the boots off before coming into her class with its nice clean floors. This attempt at tidy housekeeping lasted only a few minutes before she decided that the potential damage to the floor was less dangerous than the lethal gasses emanating from our thick wool socks that were changed perhaps once every two months.

The Basic Wellington Boot

No self-respecting country home would be without several pairs of these boots ready to clump around damp fields covered in knee-high gorse that hides mounds of animal droppings. Those city visitors who foolishly thought they could escape the mandatory freezing country-side rambles by leaving their boots at home are boisterously handed a convenient spare pair that bears the marks of many a forced march over the moors and highlands. It is made crystal clear that the path to that warming glass of whiskey in front of a roaring fire before dinner lies through the bogs and fields well marked with ‘public footpath’ signs.

Today, however, it is clear that the requirements of highlands and farm yards have moved to the wilds of Kensington, Knightsbridge and Chelsea in London as form surely transcends function. The weather can be warm and sunny, the streets dry, and not a barnyard animal in sight – but legions of London shoppers feel compelled to replace Ferragamo with Hunter as they trod the floors of Harrods and Harvey Nichols that can be as slippery and hazardous as any Devon moor. It is not just London that has succumbed to the dubious charms of high rubber boots. Smart shopping centres in places like Istanbul, where it may not have rained in three months, are filled with people showing off their latest English country footwear.

Makers of these boots have clearly grasped this phenomenon and now market their product in a wide variety of colours, heights, and size. Where once you had the bog-standard unisex green boot you now find pink boots, ankle high boots, polka-dot boots and patriotic boots with the Union Jack on them. Not to miss out on a trend, the French produce an up-market boot called the Chameau  that can be yours for about £300, or $470, compared to about $70 for the standard version. For sure, a very nice rubber boot. But still a rubber boot. The Irish also realized a good thing, and produce a boot with leather bands that also sells for about £300. As one shop keeper explained, the Dubarry are ‘much too smart’ to use for something as basic as farm yard work. Maybe they’re suitable for a trip to the horse races at Cheltenham, in the stands mind you, not the stables.

The Vital Dubarry Accessory -- Yours for about £300

The Chameau -- Another £300 Accessory

The proper English country look would not be complete without two other fashion items – the monster Range Rover 4X4 and the ubiquitous waxed Barbour jacket. Once upon a time Rover produced a utilitarian country vehicle called the Land Rover. It steered like a tank, seemed to have no springs, and had a transmission requiring both arms to change gears, but it could go anywhere. There was a certain cachet to owning a beat-up Land Rover, but now the city-dwellers prefer the Range Rover with all the mod cons like automatic transmission, electric windows, and comfortable seats. The fact that it completely occupies many of London’s smaller streets and guzzles gasoline in a country where gas cost about $9/gallon does not seem to bother anyone. They are the indispensible to establish one’s place in the daily school run, for the jaunt to the country house in the Cotswolds, or for lining the village green during the local cricket match.  Just don’t actually take them out into the fields.

This sort of unconscious cultural image projection is a much more pervasive and powerful marketing tool than any number of mind-numbingly boring trade fairs. Take the American West, for example. Cowboy hats, boots and chaps to protect your legs from thorns and cactuses are very useful items when actually riding in the wide open spaces of western America. But now, just like the Wellingtons, cowboy boots have become just another fashion item. Walk down the wild, open spaces of any London street and you will see legions of women staggering along in high heeled cowboy boots. They are often wearing wide-brimmed cowboy hats to shield themselves from the brilliant London sun.

Forget the trade fairs and brochures to market useful things like machine tools. Just re-play British TV classics like Upstairs, Downstairs  and Downton Abbey or American Westerns like Gunsmoke and Bonanza. Then your image-fulfilling products will jump off the shelves.

At Least The Flag Has Returned

Well, at least the weather is good and the flag on Andros is flying again. A group of private Andros citizens, with no help from any official sources, decided on its own to buy a new flag and hoist it up the flag pole next to the ruins of a Venetian fort guarding the harbour. The rubbish, however, remains in the same sorry state as Greek politics. In rubbish as in national politics and economic matters the people are united in what they don’t want, but completely disunited on exactly how to achieve what they say they do want.

The Flag Is Once Again Flying

 Voters in the general elections completely rejected the two traditional forces of the so-called left and so-called right that had dominated Greek politics since 1974. Many would say that the families and groups dominating those parties have actually ruled Greece for much of the last 100  years. Antonis Samaras, leader of the conservative New Democracy, badly misjudged the mood of Greek electorate when he demanded an early general election before any benefits of the structural reform package filtered down to the people. He had hoped to use the widespread discontent with the Socialist party PASOK to catapult his party into a leadership position. This narrow political calculation backfired badly.  Instead of attaining a leadership position he has plunged Greece into a prolonged period of uncertainty. Both the main parties were severely punished at the polls, and the new Greek parliament will include parties, from the neo-Nazis to the old-line Stalinist communists. It is doubtful that any party will be able to form a government. Therefore, the country will have to go through the entire general election process again sometime this summer. Well done, Mr. Samaras.

Assuming you can even get these diverse parties to sit in the same room, finding something – anything - for them to agree upon will require more skill and statecraft than any Greek politician seems to possess. More than 60% of the votes were cast for parties that rejected the tough structural reform program that has made austerity a four-letter word in Greece. Voters demonstrated that they were shocked, Shocked at the levels of cronyism, corruption and sheer administrative inefficiency that had brought the Greek economy to its knees. Millions of those same voters, however, conveniently ignored the extent to which they had benefitted handsomely from the same pattern of cronyism, corruption and inefficiency that would make any self-respecting banana republic blush.

Poll after poll has shown that Greeks by an overwhelming majority want to retain the Euro and remain anchored in the European Union. So far, so good. But, as yesterday’s election clearly shows, those same voters are unwilling to take the steps required to remain a member of the Euro club. The parties they voted for reject completely the reform package laboriously arranged with the Troika of the International Monetary Fund, the European Commission, and the European Central Bank. They blithely talk about ‘renegotiating’ the program. If the Troika, as expected, rejects any talk of renegotiation then these political parties advocate defaulting on the mountain of Greek debt, leaving the Euro and returning to the drachma. These steps are supposed to bring prosperity back to Greece and enable the hard-pressed voters once again to fill their pockets with freebies from the Generous State. The only problem with this scenario is that the Generous State no longer has any money.

Now, thanks to Mr. Samaras’s insistence on early elections, Greece is at a point where default and return to the drachma are no longer inconceivable. The Greek stock market greeted this election outcome by falling 7% on Monday. Bank stocks were down an incredible 19%. Further time will be wasted while the parties fruitlessly try to form a government with ever more unlikely coalitions. When it becomes clear that it is impossible to find a coalition with enough power actually to run the country the whole process will begin again with another election. In the meantime, nothing will get done. This is a luxury Greece can not afford.

This national indecisiveness is reflected even in local issues like the rubbish on Andros. Everyone wants it to go away. But you ask three people just how this should be accomplished and you get at least five opinions. There’s vague talk of a modern treatment plant. But where to put it? Everyone thinks such a plant is a good idea – as long as it is far away from their land. Greece is by no means the only country to suffer from the NIMBY (Not In My Back Yard) syndrome, but unfortunately Greek institutions are not strong enough to overcome this problem and force a compromise. Elected officials on the island don’t want to offend anyone by taking difficult decisions on issues like treatment plants for rubbish and sewage. One is reminded of Charles Dickens’ character Mr. Micawber who lived on the faith that ‘something would turn up.’ Unless they take those difficult decisions, however, the only things that are going to ‘turn up’ are overflowing rubbish bins and a severely polluted harbour.

Forget Plan 'B', They Need Plan 'A'

The ruthless Syrian regime may be losing the international public relations war. But it is slowly and viciously grinding down the remnants of opposition, and remains entrenched  in power.  It wasn’t supposed to happen this way. Just as in Libya the forces of ‘good’ in the world were supposed to use their power and prestige to help the long-suffering Syrian people free themselves from the strangle-hold of a despotic regime. Instead, Syria is proving to be the place where the so-called Arab Spring could turn into the deep freeze of the Arab Winter.

Our friend Rainer Hermann, long-time Middle East correspondent for the Frankfurter Allgemeine Zeitung, is in frequent contact with all sides in the Syrian conflict and offers valuable insights into the problems there. Rainer speaks fluent Arabic, and his constant travels throughout the region and huge list of contacts give him a unique and valuable perspective on these developments.

The first problem facing the opposition groups is that the bulk of the Syrian army is remaining loyal to the regime. A few soldiers and a handful of officers have defected to the opposition, but so far the vast bulk of the military together with all the heavy weapons remain with the regime. The opposition is left with light weapons and dedicated volunteers who are no match for a trained military force willing to resort to any degree of barbarity to stay in power. There is no quarter in this battle, no compromise possible where the leadership of the military is closely allied with the minority Alawite regime. The military leadership realizes its future would be grim indeed if the majority Sunni part of the population were to assume control.

The second major problem is that the opposition is bitterly divided. Various groups and a myriad of splinter groups often cannot even sit in the same room, let alone decide on a common strategy. Some want a stronger military presence, others demand negotiations with the regime. Many of the local coordinating councils detest the national council. Many resent those who spend all their time talking with foreign diplomats instead of fighting on the ground. Essentially, there is no common platform, and the opposition has been unable to convince the ‘silent majority’ to join the struggle. Many of the Syrian bourgeois middle class are remaining on the sidelines unconvinced that the opposition has a clear plan, let alone a decent chance to succeed and install a regime any better than the one they already have.

“Forget Plan B. There’s no Plan A,” one frustrated Syrian friend said.

This critical mass of people may not like the Al-Assad regime, but they like the confusion that followed uprisings in Egypt and Libya even less. We have Christian Arab friends in London who are very nervous about the potential for fundamental Sunni control of Syria.

“Up to now, the Christians in Syria have had a decent time. The churches and monasteries are open. No one hassles them. Look at Egypt now. See how the Copts are being mistreated. The Western countries have no idea what will follow the overthrow of Al-Assad. They have to be very careful,” our neighbour said.

The third major problem faced by the opposition is the complete paralysis of the international community. Remember Bosnia? This is just as bad. There has been a torrent of words, but so far precious little action. The Al-Assad regime can hide behind its Russian and Chinese protectors and ignore the pious protests from the European Union, the United States, and the toothless United Nations. A few U.S. senators have called for military intervention, but fortunately cooler heads have prevailed. One hopes the Americans have learned the dangers of ‘regime change’ forced from the outside.

Turkey is in a very difficult position. Thousands of Syrian refugees have fled across the border into Turkey. The Turkish government has turned against its one-time friend Bashar Al-Assad and issues daily verbal thunderbolts against him. There is a lot of loose talk about the Turkish army setting up a buffer zone inside Syrian to protect civilians caught in the middle. I doubt very much that Turkey would ever act on its own. The geopolitical/economic balances in this part of the world are extremely delicate. Turkey’s large Kurdish population is already restive, and the militant wing of fighters in the PKK shows no sign of giving up its attacks. However unlikely, the last thing Turkey needs is for Syria to start helping the Turkish Kurds in retaliation for any incursion by the Turkish military. Then there is Iran, also a strong supporter of the Al-Assad regime. Turkish – Iranian relations are already tense, and any overt move against Syria would only heighten those tensions.

The hard, cruel fact is that right now there is no obvious solution. The only thing that is clear at this point is that any sustainable solution is going to have to come from within Syria itself. Outside intervention on behalf of the opposition is just not going to happen. If the opposition could unite and develop a common platform for a non-Assad Syria the hitherto ‘silent majority’ might just become a little less silent and lend its voice to the opposition. But that, unfortunately, is a very big ‘if’.

Is The Natural Beauty Getting Buried?

It used to be that trips to the islands were a blessed respite from the confusion and mind-numbing negotiations, strikes, and political maneuvering that pass for normal life in Athens these days. After listening to debates about abstruse acronyms such as PSI, CAC, ECB and so forth it was a relief to get on a ferry and head to an island, any island, where life tends to run at a slower speed and reduced decibels.

Sadly, this year a winter trip to Andros served mainly as a reminder of official lethargy and confusion in the face of a long-term and increasing problem. This problem has nothing to do with the much-debated Greek pension plans, strikes, or debt repayments. The problem is quite simply the growing mounds of rubbish that blight all corners of this otherwise lovely island.



An all-too-common sight

This is by no means a new issue for Andros. The previous municipal administration also had no answers, and tried to solve the problem by burying it, literally. Unfortunately, the place they chose to bury it collapsed under heavy rains about a year ago sending tons of Andros rubbish into the sea and, eventually, onto other islands miles away. People on those islands were not amused.

That was more than a year ago. Since then, despite several official promises that ‘things were going to get resolved’ nothing has been done. Consequently, large mounds of rubbish pile up all over the island. From time to time they are collected and even shipped to treatment plants in Athens as a last resort at vast expense. Sometimes they resort to the very clever solution of turning streets leading to the main town into improvised garbage dumps.



One of the main streets turning into a dump



Even the streams are clogged

This year the locals have greeted the advent of the Orthodox Lenten season with more than the usual religious fervor and expectation of miracles.

“Thank God for Clean Monday (the beginning of Orthodox Lent). Before then the rubbish was even worse than you see now. You could barely walk anywhere. Suddenly the officials got busy and started to clean things up about a week ago. I have no idea where they’re taking it, but at least the mountains of rubbish are somewhat reduced. Fortunately we have had a cold winter so the stench was somewhat controlled. We will probably have another break for Easter when I’m sure they will find another place to hide it as the island starts to fill up again. We could do with another miracle. God knows what they will do in summer when it gets really hot and the population of the island more than triples,” said one disgusted local.

It’s not as if they are no solutions. Several have been proposed, but for some mysterious reason none has been acted upon, or even widely discussed. One of the better ones seemed to be the construction of a treatment plant at the southern tip of the island far from any population center. One land owner even said he would make more than enough land available. One attraction of this plan would be that the plant could also handle the rubbish that could be brought from the neighboring island of Tinos, only a few hundred yards away. There may be no Greek government funding available for such a project right now, but officials could at least research the possibility of a European Union grant on environmental and health grounds.

But so far, there is only thundering silence from local officials. Andros is blessed with unparalleled museums, wonderful neo-classical buildings, beautiful hills, ancient pathways, green valleys, rushing streams, and, of course, the Aegean Sea. With these natural resources and rich maritime tradition Andros could be a magnet for up-market, high quality tourism. But sadly, this opportunity seems to be slipping away under ever increasing mounds of rubbish.

While I’m at it . . . I have no idea who is responsible for maintaining historic monuments on Andros, but I really do wish someone would take a look at the remains of the Venetian castle that guards the entrance to the harbor of the main town Chora. This castle used to be graced by a tall flag pole with a large Greek flag  flying proudly above. For more than a year the flag pole has stood barren and rusting with no flag. A flag is a powerful symbol of pride and determination. In these difficult times it would be fitting to see that symbol returned to its rightful place. “We may be in tough shape, but we’re still here.”




Where is the flag?